Our 2023 predictions for News, Publishing and beyond

"This is going to be the year we see the full emergence of a user-friendly, and genuinely useful AI technology: ChatGPT. The bot tool is a natural language processing model, meaning it is designed to generate text that appears as though a human wrote it. Already we are flooded with predictions and reports of Chat GPT writing academic reports, school projects, and financial analysis that is better, or at least on par, with human-led intelligence. Microsoft is set to invest $10 billion in Chat’s parent company OpenAI as part of a funding round that would value the company at $29 billion. Astonishing, but an incredibly exciting new technology that means AI - perhaps for the first time - actually makes sense to normal human beings, and has practical application. Because we don’t yet know what this means for daily activities and jobs - including writing and research - we can expect some huge upheavals in the future. Watch this space."

"The economic headwinds in 2023 will force many organisations to focus on increasing efficiency and reducing costs. Larger and more cost-intensive departments and functions will be under particular scrutiny with the more prudent organisations making profound reforms to their key structures and processes. However, the economic challenges will also bring opportunities, particularly to those companies that remain laser-focused on their customers and seek opportunities to better build and track user engagement."

"Since March 2020, there's been a never-ending queue of media businesses launching direct-to-consumer models with varying success. Growth and volume of subscriber acquisitions were high during periods of lockdown - Now we've entered a sustained period of high inflation, retaining subscribers is the key challenge for these same media businesses.

This heightened inflation should dampen the M&A market through increased borrowing costs. However, the competitive streaming market will see a lot more industry consolidation as brands fight for complementary and adjacent content to add to their libraries to improve customer stickiness. Amazon Prime has increasingly been investing in sports content, such as their Barclays Premier League coverage, whilst Netflix launched fitness-related content this month. I think we will see at least 2 significant acquisitions by the cash-rich incumbents to add to their bundles, and thus increase customer lifetime value."

"Developing direct relationships with readers has always been an important component of a publisher's strategy. But this year, it's different. A combination of events: Chrome's deprecation of third party cookies, the continued (and growing) popularity of digital subscription models and a wider acknowledgement that reader revenue and advertising can (and should) coexist - has put registration top priority for many. FT Strategies research, involving over 450 news publishers around the world, helped to evidence the importance of logged-in readers - 68% of "very profitable" publishers recorded logged in audiences of over 7.5% (the equivalent figure was 12% for loss-making publishers). Predicting how these strategies are executed is more complex and contextual - Registration Walls, whilst effective and popular, can be very damaging for ad impressions and short-term ad revenue - so there is no "one size fits all" approach."

"With the economy looking set to contract in 2023, sustainable business models will be more important than ever - even for companies pursuing high-growth strategies. Given the large number of venture-backed fintechs, prepare to see more acquisitions and partnerships across financial services in the next year."

"The Big Four accounting firms will have to further split up their audit businesses into standalone companies, following the lead of EY. This will result in a seismic shift within the UK’s professional services industry, one of the few industries to have successfully navigated the country’s recent economic turbulence. By necessity, these firms will have to focus more intensely on developing sustainable business models that divest from the Big Four’s “bread and butter”.

Furthermore, these challenges are likely to manifest in terms of both changes to corporate governance structures and a heightened scrutiny of people practices. The recent investigations into the Spanish branches of the Big Four regarding employee welfare should provide a stark warning to their UK counterparts and highlight an ongoing need to make their human resources a high priority throughout their organisations."

"Despite some thinking we've reached 'peak email', I expect newsletters will continue to be a powerhouse for subscription-based publishers and even become profit centres in their own right. We're seeing local and B2B publishers innovate to good effect with different formats and differing payment models, not least 6am City, Smart Brief, and more tools are cropping up to support email creators. Fundamentally, there are few better signals of purchase intent or engagement than a regularly opened newsletter and more publishers will cotton onto that in 2023."

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